Sorry to hear that your bank has reduced your loan approval. It is really important that you ask your lender the reason for reducing the loan amount so you can proceed in your home buying quest with full information. If it has nothing to do with your income and qualifications then you can always shop around for a new lender. If is was based on your verifiable income and debt ratios then this, in a way, is a blessing. It will prevent you from being among the thousands who bought more home than they could afford and are unable to make the monthly payments.
Now to the other issues covered above.
1. An offer on a short sale is contigent on the seller's bank agreeing to take less than the full amount owed them. The offer should have included a C.A.R. form SSA that clearly states this contingency. Until the seller's lender agrees, you effectively have only a contingent offer.
2. All offers have other contingencies in them. One of those contingencies is the ability of the buyer to get the financing. Obviously, you cannot get the financing, so you cannot remove this contingency and effectively, you do not have a valid offer submitted.
3. Your agent works for you!!!! Too often agents are too focused on their next paycheck and not their client's well being. Your agent has a duty to YOU, the client, to follow YOUR instructions and protect YOUR interests. If your agent will not assist you in submitting a formal cancellation on your offer, then call your agent's broker. They should be willing and able to help you out. Your offer was effectively presented by the broker, not the specific agent you are working with and they need to know that your agent is not willing to help you cancel your offer.
Hope this helps and you are still able to find a home that you can afford, with comfortable payments and a 30 year fixed rate fully amortizing loan. Now is a great time to find these deals as housing prices remain affordable, inventory remains high and interest rates are at their lowest levels in history. Dare to Dream.
Real Estate Consultant
RE/MAX Palos Verdes Realty